Businesses across Nigeria are showing reduced confidence in the country’s economic outlook, according to the latest Business Expectations Survey (BES) by the Central Bank of Nigeria (CBN). The report indicates that the Overall Confidence Index (OCI) for the coming three months has dropped by 3.2 points, now sitting at 14.5, down from 17.7.
The BES for October also reveals declines in confidence for the current month, next month, and the next six months. The OCI for October dropped to 1.4, while projections for November and the upcoming six months fell to 4.8 and 21.8, respectively. These figures are down from 3.2, 6.2, and 29 points recorded in September.
One significant factor behind this dip in confidence is the anticipation of further depreciation of the naira by year-end. Businesses are bracing for a weaker naira in the near term, with expectations of depreciation in the current and upcoming months. However, they predict some improvement in the naira’s value over a six-month horizon.
The survey also highlighted several key challenges facing businesses, including high-interest rates, insecurity, excessive taxation, inconsistent power supply, and an unfavorable economic climate. These constraints continue to affect firms’ ability to operate efficiently, impacting their outlook on Nigeria’s economic stability.
Despite these concerns, many businesses remain optimistic about their internal operations. Positive sentiments were recorded in several areas, including business activity volume, total orders, financial conditions, and access to credit, suggesting a resilient outlook within individual companies, even amid broader economic challenges.
In October, confidence in the business outlook varied across sectors. Respondents from most sectors maintained a positive outlook, though the industrial sector reported less optimism.
The CBN’s survey provides a snapshot of the business community’s current sentiment, highlighting the need for policy measures to address challenges and boost confidence in the Nigerian economy.
